Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2012 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (7) TMI 728 - AT - Income TaxAddition on account of adjustment made by the TPO in respect of management service fee and coordination cost - assessee contested that these payments have been accepted in all past years by the AO as well as TPO on consistent basis with no addition/TP adjustment has ever been made - TPO rejected the TNMM method and applied CUP method - Held that:- Since the assessee had placed evidences in respect of the management service charges and client coordination fee on record, the Revenue had not brought out anything for negating any content of the chart of services submitted by assessee and benefits derived thereof - evidences have been submitted before the authorities below showing rendering of the certain services against the payments made to the AE - the value of these services cannot be taken at nil which the AO as well as TPO originally sought to do - thus examining the chart where assessee has enumerated in detail and description of type of services received and how these services have been received and in what manner the benefits have been derived from these services by the assessee company no justification to sustain any addition in this regard on this issue - in favour of assessee. The assessee company has disclosed net margin for 26% as against 8% average of the comparable other companies at entity level. The assessee is engaged in one class of business that is advertising and its allied services. In the business of the assessee, there are no segments or different activities which can be said independent of each other. Thus, the entity level benchmarking on TNMM method shall be most appropriate for all international transactions with AE. Dis allowances u/s 40(a) - Held that:- Both the sides had agreed that these issues may be restored To the file of the Assessing Officer for deciding de novo it proper to restore the issue. Against levying interest u/s 234B - Held that:- As the charging interest is mandatory and has a consequential effect, therefore dismissal of ground.
|